The move could be driven by the company's already-established hardware technology, and supported by the evolution of the iPod, which now supports limited gaming.

It has recently been noted that Apple was advertising for and hiring video game executives and programmers from across the US.

Prudential also believes that it would be a smart move in the long run for Apple in order to stave off competition from Microsoft, who are edging into the home entertainment sector with its Xbox 360 download service.

“The game console device could be morphed out of some combination of the MacMini and iTV, while the handheld player could be developed as an enhancement for a future version of the widescreen iPod”, said Tortora.